87 A.D. 522 | N.Y. App. Div. | 1903
The appellant contends that each of these trusts is invalid, first, because the subject-matter was not identified in such manner at the .time it was created that the legal title could or did pass to the trustees ; second, because there was no adequate delivery of the subject-matter ; third, because the promissory notes had neither legal inception nor sufficient consideration to support them, and, fourth, because there was no intent to create a trust which should become legally operative during the settlor’s life and that his intention was to make a testamentary disposition of the property which would not be subject to a will contest. . .
At the time of creating the other trusts it is doubtless true that the settlor could not have maintained an action against his firm for the moneys standing to his credit on the firm books; but on the facts here presented he had the right, as against his copartners, to withdraw from the firm business the amount standing to his credit on the loan account. They do not appear to have objected to this course, and we fail to see how any one, other than the creditors of
Neither the reservation of the power of revocation or modification nor the recital that the beneficiaries received the benefits of the trust solely through the bounty of the settlor rendered the trusts illegal. (Von Cott v. Prentice, 104 N. Y. 45; Von Hesse v. MacKaye, 136 id. 114.) The settlor under this reserved power undoubtedly could have revoked the trust; but he did not do so, and, therefore, the reservation of the power of revocation or modification becomes immaterial. In the deeds of trust, other than that for the benefit of Marion Smith, which are in form an indenture between the settlor and two trustees named, after reciting that the trustees are to loan the money to the firm on six per cent note or notes, the interest payable semi-annually, the deed contains the following clause: “ And upon the decease of the said Joseph H. Brown (or before his decease should we in our discretion see fit so to do) to demand payment of said note or notes.” The appellant contends that in view of this clause the trustees were not authorized without the consent of the settlor to collect the notes during his life. The deed of trust in each instance was signed by the settlor only; and the acknowledgment -of the receipt of the money and declaration of the trust for which it was received, following the languáge of the deed of trust in each instance, executed simultaneously therewith, was signed only by the trustees. We think the proper construction
Lastly, it is contended that these trusts constitute a testamentary disposition of the property in violation of the Statute of Wills, and stress is laid on the provisions of the will showing the ■ feeling of the settlor toward his family. It is also pointed out that through the reserved power of revocation the testator could and it is claimed that he would have prevented the trustees from collecting the notes during his lifetime. This may be so, but it cannot be definitely affirmed. The firm having remained solvent, there was no occasion for the trustees to call in the loan. If they had had reason to believe that the investment was insecure it would have been their duty to collect the notes. Whether he would in that event have revoked the trusts is a matter of speculation. The Court of Appeals having decided in Van Cott v. Prentice (supra) not only that the reservation of the power of revocation or modification, but an express provision that the trustee shall hold the fund subject to the direction and control of the settlor does not invalidate a trust of personal property, it follows, we think, logically that these' trusts are. valid. Here the legal title to the notes was in the trustees. If they attempted to collect the notes he could have revoked the trusts, but he could have revoked them at will whether they attempted to collect the notes or not. Until they were revoked, the legal title to the property was in the trustees and the beneficiaries had a present interest therein during his life. In these circumstances it will not do to attempt to spell out an intention on the part of the settlor to exercise the power of revocation to prevent the beneficiaries receiving any actual beneficial interest in the trusts during his life. (See Von Hesse v. MacKaye, supra.) As between the beneficiaries and his next of kin or heirs, the trust, being legal in form and for purposes not forbidden by law, should be given force and effect.
It follows, therefore, that the judgment should be affirmed, with one bill of costs to the respondents.
Van Bbunt, P. J., Patterson, O’Brien and McLaughlin, JJ., concurred.
Judgment affirmed, with one bill of costs to respondents.